Minimum Rage: The remix

[Lumpenproletariat]

Minimum wage is based on the premise that free choice "hurts" us.

#140
Togo

A "fair rate" is the market rate, based on supply-and-demand. Just like the "fair" price for a loaf of bread is the market price, set by supply-and-demand.

This price is "fair" because it is best for consumers. It ensures that the price or wage is high enough in order to get the production done, for the consumer's benefit, but no higher than the minimum necessary to accomplish this production.

I don't agree. Do you have any evidence for this (ideological?) assertion?

You mean the price for a loaf of bread at the store is not the best price for consumers? You would have all products be priced by a different mechanism? What pricing mechanism would be better for consumers? Should the government dictate the price for every product? Why would that be better for consumers?

Is there a better way for everything to be priced than to have buyers and sellers make their individual free choices? Why isn't individual free choice a good system for setting the prices? Why isn't this a good system for the both the buyers and sellers?

Isn't it good for the sellers to increase the price on an item if the demand for it increases or the supply of it decreases? Or reduce the price if the supply increases or the demand decreases? You don't see the benefit of this pricing system?

Any artificial propping up of any price above this level hurts everyone.

Only to the same extent that consumer choice hurts everyone.

How are we hurt by being allowed to make choices? Having free choice "hurts" us? And we are spared this "hurt" by being locked up and denied any choices?

Given that this 'hurt' is regularly inflicted by consumers on themselves, it seems to be a very transitory concept.

OK, so here's where the logic brings us: Those opposed to minimum wage believe it's good for people to have free choice, whereas those favoring minimum wage believe that choice hurts everyone and that we inflict "hurt" onto ourselves by having free choices.

 

[Togo]

A "fair rate" is the market rate, based on supply-and-demand. Just like the "fair" price for a loaf of bread is the market price, set by supply-and-demand.

This price is "fair" because it is best for consumers. It ensures that the price or wage is high enough in order to get the production done, for the consumer's benefit, but no higher than the minimum necessary to accomplish this production.

I don't agree. Do you have any evidence for this (ideological?) assertion?

You mean the price for a loaf of bread at the store is not the best price for consumers? You would have all products be priced by a different mechanism? What pricing mechanism would be better for consumers?

How about the one we have now? Surely that serves customers far better than a simplistic model where you only take in account supply and demand.

Any artificial propping up of any price above this level hurts everyone.

Only to the same extent that consumer choice hurts everyone.

How are we hurt by being allowed to make choices?

The cost of providing a range of products is passed onto the customer in the form of higher prices. Choice isn't free, we pay for it.

Given that this 'hurt' is regularly inflicted by consumers on themselves, it seems to be a very transitory concept.

OK, so here's where the logic brings us: Those opposed to minimum wage believe it's good for people to have free choice,...

Well apparently they don't. They talk about free choice, but they don't support any form of free choice that doesn't come in the form of lower prices or supply and demand models. That's why they get so upset about things like organic bread or fair trade coffee.

 

[DBT]

As an exaggeration it is fair. In both cases one class of people is singled out for special pity not extended to other classes.

I.e., left-handers are an arbitrarily-chosen class, and wage-earners are an arbitrarily-chosen class.

Why is this particular class chosen for preferential treatment? Why don't we also provide income support for independent contractors, many of whom are poor?

The CPI does not choose any class or profession, it is simply an index for the cost of living based on the cost of housing, food, clothing, etc. This may br adjusted for singles or a family of any size. That is why your analogy is false.

But what if there are 2 of these workers, and one has a family of 7 while the other lives alone. Is the "fair" wage for the latter lower than for the one with the large family?

It's "fair" for one to be paid 3 or 4 times as much because of his large family, even though both are doing the same work?

As I've said, the Consumer Price Index is based the current cost of goods and services, market value. The CPI can be easily applied to the number of people that are in a living in a single household.

So then by this logic we need to also have a minimum profit law which ensures that investors receive enough return on their investment to cover their expenses.

No, it means that a business owner or investor cannot meet his or her living expenses based on the return they are getting. There are various options that can be explored for those investors or business owners that are not getting sufficient return. Government bailouts, business grants, loans, etc. But if the investment is simply not profitable, it's better to bail out.

 

[Lumpenproletariat]

Premise for minimum wage: consumer choice is bad, and everything should be free to consumers.

#142
Togo

A "fair rate" is the market rate, based on supply-and-demand. Just like the "fair" price for a loaf of bread is the market price, set by supply-and-demand.

This price is "fair" because it is best for consumers. It ensures that the price or wage is high enough in order to get the production done, for the consumer's benefit, but no higher than the minimum necessary to accomplish this production.

I don't agree. Do you have any evidence for this (ideological?) assertion?

You mean the price for a loaf of bread at the store is not the best price for consumers? You would have all products be priced by a different mechanism? What pricing mechanism would be better for consumers?

How about the one we have now?

Right, the current pricing mechanism is the right one, for the reason I just gave above. It's based on supply-and-demand, which is best for consumers, because it ensures that the price is high enough in order to cover the cost of production, so that the production takes place, but no higher than this figure, in order to make the production available to consumers at the lowest possible price.

So why are you asking for evidence for something you already agree with? Namely, that the current pricing mechanism, such as for a loaf of bread, which is based on supply-and-demand, is the one which best serves consumers? Which leads to the further question: then why shouldn't that same pricing mechanism also apply to labor, so that labor too should be priced according to supply-and-demand, just like a loaf of bread is priced? which also would best serve consumers?

Surely that serves customers far better than a simplistic model where you only take into account supply and demand.

Planet Earth to Togo. Planet Earth to Togo. Come in Togo.

OK, are you tuned in now? This is Planet Earth, where the market system is used to price virtually everything bought and sold. Including groceries at the store. I.e., based on SUPPLY-AND-DEMAND, not on anything other than supply-and-demand.

That means that when the supply of something increases or the demand for it decreases, all else being equal, the price goes down, and when the supply decreases or the demand increases, the price goes up. Planet Earth -- got it?

But I'm curious -- that planet you thought you were at, where supply-and-demand is not the "model" for setting prices, what is the pricing mechanism?

What else is taken into account for setting prices than the principle of supply-and-demand?

Any artificial propping up of any price above this level hurts everyone.

Only to the same extent that consumer choice hurts everyone.

How are we hurt by being allowed to make choices?

The cost of providing a range of products is passed onto the customer in the form of higher prices.

Providing more products -- more consumer choice -- leads to higher prices?

What does this mean?

I can think of only one scenario where this has any connection to reality: In some communist countries, like the Soviet Union and Cuba, there was an underground economy, or black market, which operated illegally and provided a greater range of products than were available in the state-run stores.

In both those countries the underground market thrived and supplied a vast array of the products people wanted. But the prices were higher than in the state-run stores for those products that were sold at both. The problem was the constant shortage of products in the state-run stores, and so consumers had to go to the illegal market to buy what they wanted. Also they had to wait too long in line at the state-run stores so it wasn't worth their time waiting there for hours.

Choice isn't free, we pay for it. Given that this 'hurt' is regularly inflicted by consumers on themselves, it seems to be a very transitory concept.

In other words, you think the black market in the Soviet Union and in Cuba hurt everyone. (". . . consumer choice hurts everyone" you say, because of the higher prices in the black market.) Even those who bought from the illegal sellers were "hurt". In both countries the government finally relented and allowed the black market to operate legally, which was wrong, according to you, because this led to more "consumer choice" which hurts everyone and leads to higher prices. It would have been better for the state to suppress the black market and arrest those illegal operators and pack them off to Siberia, or to the fields to harvest sugar cane.

And it's on the basis of this premise, that those black market operators were hurting everyone by giving them "consumer choice" and so should have been suppressed, that you base your argument in favor of minimum wage.

So your premise is that "freedom" means that we get products without having to pay a price for them. So "freedom" does not mean making choices, but rather, it means having products for free rather than having to pay for them.

And you favor giving everyone access to products that are free but denying them any choice of the products, or consumer choice, which is bad because it "hurts" consumers.

You would eliminate choice for consumers and replace it with free products for them, but products that would be selected for consumers by someone else who would determine what products they receive, since it is bad for them, or hurtful, for them to make any choices for themselves.

And this reasoning is also your philosophical basis for having minimum wage laws.

Got it.

But there's a contradiction: If everything should be free to buyers, why shouldn't labor also be free?

Your utopia, to be complete and consistent, has to make labor available free to any employer; and then the state would have to pay the wages, so then you have the high wages to workers but free labor to any employers.

It has to be free, in order to eliminate the "hurt" they feel from the cost of labor, or price of labor, just like prices "hurt" consumers.

OK, so here's where the logic brings us: Those opposed to minimum wage believe it's good for people to have free choice, . . .

Well apparently they don't.

Apparently they do. They object to minimum wage because it denies employers and employees freedom to choose the wage level.

They talk about free choice, but they don't support any form of free choice that doesn't come in the form of lower prices . . .

They support all free choice, including the choice to buy something more expensive.

. . . or supply and demand models.

What other "models" are there? What "free choice" is there that comes in some other form than that of "supply-and-demand"? What is an example of "free choice" that opponents of minimum wage do not support?

That's why they get so upset about things like organic bread or fair trade coffee.

No one gets upset about these.

However, there is fraud in some promotions of these and other products. The terms "organic" and "fair trade" are not clearly defined, and some consumers are defrauded into believing there is something superior in a product labeled as "organic" or "fair trade," when the product is not really superior at all, and there is nothing wrong with investigating promotional claims or advertising that misuse these terms in a way as to defraud consumers.

The benefits of "consumer choice" do not apply in those cases where the choices are a response to fraudulent claims for the products they are choosing. Except for this concern, no one is upset over products claiming to be "organic" or "fair trade."

There are similar problems with vitamin and mineral supplement products. It isn't the "free choice" of consumers that anyone objects to, but false claims by producers or sellers which mislead consumers and influence them to make choices they would not make if they had accurate information about the products.

So those who have questioned "organic" or "fair trade" products were not against any "free choice" as you falsely assert, but were 100% in favor of "free choice" as long as the sellers made no fraudulent claims that deceived consumers into making those choices.

 

[bilby]

Really? You reckon the quote tag is the biggest problem with your screed?

 

[Lumpenproletariat]

#143
DBT

Why is this particular class chosen for preferential treatment? Why don't we also provide income support for independent contractors, many of whom are poor?

The CPI does not choose any class or profession, it is simply an index for the cost of living based on the cost of housing, food, clothing, etc. This may be adjusted for singles or a family of any size. That is why your analogy is false.

The question is whether there should be a minimum wage, not whether there should be a CPI.

So then you agree there should be no minimum wage law, because minimum wage law singles out a particular class of producers, wage-earners, and grants to them a benefit denied to all other producers. And also targets a particular class, employers, to be penalized, but does not impose a similar penalty on any other class.

And you can't give any reason why this particular class of producers, wage-earners, should be entitled to this preferential treatment. Or why employers should be selected out to be penalized in a way that no other class is penalized.

But what if there are 2 of these workers, and one has a family of 7 while the other lives alone. Is the "fair" wage for the latter lower than for the one with the large family?

It's "fair" for one to be paid 3 or 4 times as much because of his large family, even though both are doing the same work?

As I've said, the Consumer Price Index is based the current cost of goods and services, market value. The CPI can be easily applied to the number of people that are in a living in a single household.

You're not addressing the above question. So we can only assume that you believe an employer should have to pay 3 or 4 times as much to a worker who has a very large family, even though that worker does exactly the same work as another worker who is single?

You have to make up your mind: Is the wage to be based on the need of the worker to pay his cost of living? or on the value of the work done?

Based on your logic so far, the answer is that the wage is based on the worker's cost of living, and so therefore a worker with a large family must be paid at least twice as much for the same job as a worker who lives alone.

Nevermind the CPI. That's the method of calculating the cost of living. The question is: Should the employer have to pay the worker with a large family at least twice as much as the worker with no dependents?

And you're not going to answer it obviously. And the reason is that you are contradicting yourself and cannot face the consequences. The truth is that an employer is not expected to pay twice as much to a worker just because that worker's living expenses are twice as great.

And therefore your primary premise is false. I.e., your premise that workers must be paid based on their cost-of-living expense. That premise is false. They are not paid based on that premise.

Rather, they are paid based on the value of the work they do. And if that is not enough to pay their cost of living, that is their personal individual problem, not the employer's problem. And employers should not have to pay workers any more than the value of their work, even if that figure is less than the workers need in order to pay their cost of living.

So then by this logic we need to also have a minimum profit law which ensures that investors receive enough return on their investment to cover their expenses.

No, it means that a business owner or investor cannot meet his or her living expenses based on the return they are getting.

Just as the low-paid worker cannot meet his or her living expenses based on the return s/he is getting. So why is the worker entitled to be paid more in order to be able to meet this living expense while the business owner or investor is not entitled to this?

You are not answering why the wage-earner is entitled to income protection while the business owner or investor is not.

There are various options that can be explored for those investors or business owners that are not getting sufficient return. Government bailouts, business grants, loans, etc.

If they're entitled to the same kind of income supplement that wage-earners are entitled to (minimum wage), it has to be grants, and these grants would have to be perpetual, never-ending, as long as the business or investment yields too little profit for the investor to pay his cost of living.

So is that what you favor? Permanent on-going grants to any business or investor who is unable to earn enough profit to pay his cost of living?

(We're not talking about rich people here, but poor people trying to make it in business but unable to reap enough profit to pay their rent etc. They're all entitled to these on-going government grants as long as they are falling short of enough to survive on?)

But if the investment is simply not profitable, it's better to bail out.

What if the worker's job is not profitable? Isn't every worker entitled to be paid minimum wage, even if his job is not "profitable"? As long as a company wants to hire him and pays him $5 per day or whatever, which is not a "profitable" job, doesn't the MW law say that worker has to be paid the minimum wage level?

So why shouldn't an unprofitable investor or independent contractor also be entitled to a minimum income level? You just let that poor investor starve? How can you be so heartless? Why isn't he just as entitled to income support as the poor victim wage-earner is?

 

[DBT]

#143
DBT

Why is this particular class chosen for preferential treatment? Why don't we also provide income support for independent contractors, many of whom are poor?

The CPI does not choose any class or profession, it is simply an index for the cost of living based on the cost of housing, food, clothing, etc. This may be adjusted for singles or a family of any size. That is why your analogy is false.

The question is whether there should be a minimum wage, not whether there should be a CPI.

So then you agree there should be no minimum wage law, because minimum wage law singles out a particular class of producers, wage-earners, and grants to them a benefit denied to all other producers. And also targets a particular class, employers, to be penalized, but does not impose a similar penalty on any other class.

Minimum wage has been put in place in order to protect workers from being exploited by employers. It is the nature of business to minimize costs wherever possible, and that includes paying employees as little as possible. Just look at the history of the labour movement.

And you can't give any reason why this particular class of producers, wage-earners, should be entitled to this preferential treatment. Or why employers should be selected out to be penalized in a way that no other class is penalized.

Business is never helped by the Government and tax dollars? Business grants, bailouts?

Low income workers are amongst the most powerless in the workforce, without an effective union, they have virtually no bargaining power. Without bargaining power, low income earners have little chance of improving their living standard. Hence Government legislation concerning minimum wage.

Businesses are in a different position, management that is in trouble with cash flow have their own options and choices. This, unlike low income earners, does not include going hungry or homeless...which is basically the reason for minimum wage, to allow a basic minimum income to cover cost of living.

You're not addressing the above question. So we can only assume that you believe an employer should have to pay 3 or 4 times as much to a worker who has a very large family, even though that worker does exactly the same work as another worker who is single?

No, that's not what I said. Read carefully. I said that minimum wage for full time should be sufficient to support a reasonable life style. A reasonable lifestyle usually means the ability to support a family. It is not the concern of the employer how employees use their income, whether they stay single or get married, have children or remain childless.
The relevant thing here is to have an income that enables a choice of how to live your life, and not be constantly struggling to provide the basics of food and shelter, with no hope of improvement despite working full time doing productive work.

You have to make up your mind: Is the wage to be based on the need of the worker to pay his cost of living? or on the value of the work done?

Who determines the value of the work done? Think about that.

Based on your logic so far, the answer is that the wage is based on the worker's cost of living, and so therefore a worker with a large family must be paid at least twice as much for the same job as a worker who lives alone. And you're not going to answer it obviously. And the reason is that you are contradicting yourself and cannot face the consequences. The truth is that an employer is not expected to pay twice as much to a worker just because that worker's living expenses are twice as great.

You interpret what I say in a way that suits your position.

And therefore your primary premise is false. I.e., your premise that workers must be paid based on their cost-of-living expense. That premise is false. They are not paid based on that premise. Rather, they are paid based on the value of the work they do. And if that is not enough to pay their cost of living, that is their personal individual problem, not the employer's problem. And employers should not have to pay workers any more than the value of their work, even if that figure is less than the workers need in order to pay their cost of living.

And again: CPI is not only an indicator of the market price of goods and services, but the current market value of goods and services, which in turn is used to calculate the minimum income required to function in society. Minimum wage laws based on market value, are put into place to protect those that have little or no bargaining power.

 

[Lumpenproletariat]

Again, minimum-wage crusaders cannot answer the questions.

#147
DBT

Minimum wage has been put in place in order to protect workers from being exploited by employers.

But why are only wage-earners entitled to be protected from being exploited? What about independent contractors? Why aren't they entitled to similar protection? And what about small businesses, sole proprietors, who are often exploited by customers who pay low prices or fees? or by other businesses who pay them low prices for their service?

It is the nature of business to minimize costs wherever possible, and that includes paying employees as little as possible.

But it's also the nature of consumers to minimize their costs, including paying retailers as little as possible. Why aren't those retailers entitled to be protected against being exploited by greedy customers who pay them "as little as possible"? Why are only wage-earners entitled to be protected against being paid "as little as possible"?

What about poor businesses, small mom-n-pops, who work hard and struggle to survive but can't make it because their customers pay them "as little as possible"?

And you can't give any reason why this particular class of producers, wage-earners, should be entitled to this preferential treatment. Or why employers should be selected out to be penalized in a way that no other class is penalized.

Business is never helped by the Government and tax dollars? Business grants, bailouts?

We're talking about a benefit to ALL wage-earners, not just some. And a penalty on ALL employers, not just some.

Why isn't there a similar benefit to protect ALL independent contractors, ALL who are struggling to survive? Why shouldn't they ALL be entitled to a minimum income like wage-earners are? There is no government grant or bailout or other government benefit to the entire class of independent contractors which says that they are entitled to a minimum income, like there is to the entire class of wage-earners.

Why is every wage-earner in the economy entitled to a minimum income but no other class of producers is entitled to any such benefit? There are many independent contractors who are worse of financially than virtually any poor wage-earner.

Low income workers are amongst the most powerless in the workforce, without an effective union, they have virtually no bargaining power.

The most powerless of all are poor independent contractors. They have no union and no bargaining power.

Without bargaining power, low income earners have little chance of improving their living standard. Hence Government legislation concerning minimum wage.

But poor independent contractors also have no bargaining power. Why no Government legislation to protect them?

Businesses are in a different position, . . .

Some are. But not the poor independent contractors. They're at least as bad off as low-income wage-earners.

. . . management that is in trouble with cash flow have their own options and choices.

Not poor independent contractors. Or most of them. You can also say that some low-income wage-earners have "their own options and choices."

(What's the difference between "options" and "choices"?)

This, unlike low income earners, does not include going hungry or homeless.

Yes it does include going hungry or homeless, for many poor independent contractors. These too are "low income earners" ignored by you. Why do you ignore them but pretend that only wage-earners are entitled to have their income propped up by the state[?

. . . which is basically the reason for minimum wage, to allow a basic minimum income to cover cost of living.

Again, why not the same basic minimum income to independent contractors, to cover their cost of living?

You're evading the question. Why do you fall all over yourself feeling sorry for low-income wage-earners, but turn a blind eye to other categories of poor working people who are also struggling to survive?

So we can only assume that you believe an employer should have to pay 3 or 4 times as much to a worker who has a very large family, even though that worker does exactly the same work as another worker who is single?

No, that's not what I said. Read carefully. I said that minimum wage for full time should be sufficient to support a reasonable life style. A reasonable lifestyle usually means the ability to support a family.

How can a "reasonable lifestyle" mean the ability to support a family if the worker does not have a family? Why is it reasonable for a worker who does not have a family to be paid an income high enough to support a family?

How big is a "family"? Can the current minimum wage support a family of 10? Isn't it reasonable for a family of 10 to have an income 10 times larger than a single person with no dependents?

It is not the concern of the employer how employees use their income, whether they stay single or get married, have children or remain childless.

But you would force the employer to provide enough income for the employee to support his family. And that means a higher income if it's a family of 10 than if it's only 2 or 3. As long as the wage is based on paying enough to support a "family," then why shouldn't the employer be forced to pay the employee with 10 dependents 10 times as much as the single employee who has no dependents?

You are forcing the employer to be concerned whether the employee is single or married or has children. You are mandating that the employer pay more than enough for just the employee's survival, but also enough for the employee's dependents. Don't say it's "not the concern of the employer" if the worker spawns offspring but then turn around and demand that they pay enough to support a "family" -- make up your mind! Is the employer supposed to be the provider for the worker's family or not?

The relevant thing here is to have an income that enables a choice of how to live your life, and not be constantly struggling to provide the basics of food and shelter, . . .

Well then you better demand that the minimum wage be increased to $30 or $40 per hour, because any less than that is not enough to raise a family of 6 or 7 on, and so you are denying workers the choice to spawn 6 or 7 children and forcing those with that many kids to struggle to provide the basics of food and shelter.

Are you dictating that no one is entitled to raise a family that large?

You have to make up your mind: Is the wage to be based on the need of the worker to pay his cost of living? or on the value of the work done?

Who determines the value of the work done?

The market determines the value. How is the value of a loaf of bread determined? Is it not by supply-and-demand in the market? Isn't a bachelor scientist, with no dependents, but a hi-tech place in industry paid much higher than a fast-food worker with 7 kids? Why is that scientist paid more? Is it because he has greater need, to support his family, or because the value of his work is greater?

Minimum wage laws based on market value, are put into place to protect those that have little or no bargaining power.

Not really. Those who have the least bargaining power are not protected by minimum wage law or any other law.

Minimum wage law is put into place to prop up the incomes of wage-earners, who constitute the largest class of producers. It's because they are a large class that they receive this benefit which is denied to all other classes. There are many producers who are poor and have little or no bargaining power who get no such protection, because they are such a small class.

And all these other classes of poor people who have little or no bargaining power are victims of minimum wage laws which drive up prices that all of us, including the poor, have to pay.

Why should all these other poor people, admittedly a small class compared to low-income wage-earners, be forced to subsidize the incomes of wage-earners by paying the higher prices which result from minimum wage law which props up wages and thus the cost of business and thus the prices we all have to pay?

 

[DBT]

#147
DBT


But why are only wage-earners entitled to be protected from being exploited? What about independent contractors? Why aren't they entitled to similar protection? And what about small businesses, sole proprietors, who are often exploited by customers who pay low prices or fees? or by other businesses who pay them low prices for their service?

The size of these posts just keeps increasing. It's getting out of hand. Most of it is repeating and redundancies. So let's deal with one or two key point at a time?

First off, exploitation of small business owners by customers: when you call a plumber and he gives you a quote, you may accept the quote or call another plumber to get another quote. The next plumber may undercut the first in order to get the work, or he may not. It depends on work load. If he does undercut the previous quote, he may cut costs and do a shoddy job in order to maintain a profit margin, or if desperate, he may work to break even or accept a loss. As the latter is unsustainable, he'll go broke if he keeps doing it. So it's not in anyone's interest to work for a loss.

The nature of business is competition, the owner/investor is willing to take a risk in order to make a profit and is able to manage his business in order to profit.

Workers, on the other hand, only have their skills and labour to sell at the best rate they can get. If there is a surplus of labour in a given sector, without protection, wages can fall to level that does not sustain even the basic needs of these workers. Unlike the business owner, they cannot manage risk, they are at the mercy of employers. Employers who may be making a decent profit, but do not pay their workers a sustainable rate simply because there is no shortage of applicants.

As it is not in the interest of social cohesion to have workers, who are not in a position to manage risk, being exploited to the degree that they work full time but cannot meet their cost of living expenses, the Government steps in to protect the most vulnerable by setting a minimum wage.

But it's also the nature of consumers to minimize their costs, including paying retailers as little as possible. Why aren't those retailers entitled to be protected against being exploited by greedy customers who pay them "as little as possible"? Why are only wage-earners entitled to be protected against being paid "as little as possible"?

What about poor businesses, small mom-n-pops, who work hard and struggle to survive but can't make it because their customers pay them "as little as possible"?

So you think you can go to the supermarket, the cinema, restaurant, car repair workshop, travel agent, etc, and pay whatever suits your budget?

Maybe they do things differently in America, but in most developed countries, goods and services are usually at fixed prices, with occasional discounts offered.

 

[Lumpenproletariat]

#149

DBT

But why are only wage-earners entitled to be protected from being exploited? What about independent contractors? Why aren't they entitled to similar protection? And what about small businesses, sole proprietors, who are often exploited by customers who pay low prices or fees? or by other businesses who pay them low prices for their service?

First off, exploitation of small business owners by customers: when you call a plumber and he gives you a quote, you may accept the quote or call another plumber to get another quote.

Likewise, an employer can accept quotes from different workers or applicants and check with more applicants to get a different quote. They do this in one form or another.

You have to tell us a difference between wage-earners and independent contractors that explains why wage-earners have to be protected against "exploitation" but independent contractors don't need the protection.

The next plumber may undercut the first in order to get the work, or he may not. It depends on work load.

Likewise the next job applicant may undercut the earlier ones by offering to do the work at a lower wage or lower benefits.

If he does undercut the previous quote, he may cut costs and do a shoddy job in order to maintain a profit margin, or if desperate, he may work to break even or accept a loss.

Likewise a desperate job applicant who undercuts the earlier applicant might end up doing an inferior job ("you get what you pay for" whether from a wage-earner or from an independent contractor), or the desperate job applicant might work at a loss. Some do work at a loss because they make less than enough to pay their bills, and so they go deeper into debt. Yet they're still better off than if they didn't work at all.

When are you going to tell us a difference between a wage-earner and an independent contractor that explains why the low-income worker is entitled to government protection against being "exploited" but the independent contractor is not?

As the latter is unsustainable, he'll go broke if he keeps doing it. So it's not in anyone's interest to work for a loss.

That's the same for the wage-earner or for the independent contractor. Actually it might be in the interest of either to work for a loss, if it means that by working they are able to reduce their loss from what it would be if they did not work.

The nature of business is competition, the owner/investor is willing to take a risk in order to make a profit and is able to manage his business in order to profit.

Wage-earners are also taking risk. Especially if it is a dangerous job. And also they are competing. The higher-trained workers took risk to get that extra training in order to do better and outperform the less-trained workers. And workers of the same skill level are competing with each other to do better and advance ahead of the other workers who don't perform as well.

A worker is also a "business" which the worker manages. There are many business decisions a worker makes, and if he makes the wrong decisions it affects his "profit margin" even though it's not called that, but the wage-earner does have a profit margin just as the "business" does.

Workers, on the other hand, only have their skills and labour to sell at the best rate they can get.

Some of them have money saved up which they can spend or invest in improving themselves.

Some have no capital, but then also many independent contractors have no savings and have only their skills and labour to sell.

So this also is no basic difference between a wage-earner and an independent contractor. So when will you finally get to the issue of why wage-earners need to be protected against "exploitation" but independent contractors do not?

If there is a surplus of labour in a given sector, without protection, wages can fall to level that does not sustain even the basic needs of these workers.

Likewise there can be, and often is, an oversupply of independent contractors in a given sector, and their incomes can fall to a level that does not sustain their basic needs.

Unlike the business owner, they cannot manage risk, they are at the mercy of employers.

No, many independent contractors also cannot manage risk and are at the mercy of customers who won't pay them enough.

And further, many wage-earners CAN manage risk and are not at the mercy of employers and are not the crybabies you are suggesting.

Employers who may be making a decent profit, but do not pay their workers a sustainable rate simply because there is no shortage of applicants.

Likewise there are selfish consumers who are doing well financially but do not pay their independent contractors sustainable rates or fees simply because there is no shortage of independent contractors to choose from, and they choose the cheapest ones.

And also businesses who hire independent contractors may be making good profits but still hire only the cheapest independent contractors, because there is an oversupply of them to choose from.

You're still giving us no reason why wage-earners have to be protected from being "exploited" but not independent contractors.

As it is not in the interest of social cohesion to have workers, who are not in a position to manage risk, being exploited to the degree that they work full time but cannot meet their cost of living expenses, the Government steps in to protect the most vulnerable by setting a minimum wage.

But it IS in the interest of "social cohesion" to have independent contractors exploited to the degree that they cannot meet their cost of living expenses? Why is it just fine for these workers to be unable to pay their expenses but intolerable in the case of wage-earners? Why are you continuing to give us no reason why independent contractor workers should not be entitled to the same protection against exploitation as wage-earners are?

But it's also the nature of consumers to minimize their costs, including paying retailers as little as possible. Why aren't those retailers entitled to be protected against being exploited by greedy customers who pay them "as little as possible"? Why are only wage-earners entitled to be protected against being paid "as little as possible"?

What about poor businesses, small mom-n-pops, who work hard and struggle to survive but can't make it because their customers pay them "as little as possible"?

So you think you can go to the supermarket, the cinema, restaurant, car repair workshop, travel agent, etc, and pay whatever suits your budget?

You can choose to go to where the prices are lower. Just as the employer can seek job-applicants who will charge less for their labor. The same basic elements of shopping and competition apply to the employer of wage-earner labor and the employer of independent contractor labor. You haven't shown any difference between them.

. . . in most developed countries, goods and services are usually at fixed prices, with occasional discounts offered.

No, the prices vary from one seller to another, just as with wage-earners. Not all sellers offer the same prices, because they compete, and the greedy buyers, consumers, seek the lower prices and "exploit" the sellers or independent contractors, some of whom operate at bare survival level and cannot pay their expenses.

You have given us no fundamental difference between wage-earners and independent contractors which justifies protecting one from "exploitation" by selfish buyers but not the other.

 

[DBT]

#149

DBT

But why are only wage-earners entitled to be protected from being exploited? What about independent contractors? Why aren't they entitled to similar protection? And what about small businesses, sole proprietors, who are often exploited by customers who pay low prices or fees? or by other businesses who pay them low prices for their service?

First off, exploitation of small business owners by customers: when you call a plumber and he gives you a quote, you may accept the quote or call another plumber to get another quote.

Likewise, an employer can accept quotes from different workers or applicants and check with more applicants to get a different quote. They do this in one form or another.

Not if there is a shortage of workers in a given sector. Then employers offer pay rates to attract employees. During a a labour shortage, firms compete with each other to attract workers by offering better rates of pay. All well and good for those in that position, but the point remains: those at the bottom of the heap cannot afford to compete in terms of ever decreasing pay pay rates.

There is a certain level where it is simply not possible to make ends meet. Unlike a business with a reasonable cash flow, MW workers may have nothing in reserve. Not being able to make ends meet on the rate they get paid, and having no reserve to fall back on...what are they to do?

Tell me how someone is supposed to pay the bills on a rate that is not sufficient to meet even the basic needs of that worker, based on market prices.

You have to tell us a difference between wage-earners and independent contractors that explains why wage-earners have to be protected against "exploitation" but independent contractors don't need the protection.

These are two different situations, which I explained in my last post: someone who starts a business does their homework, sees an opportunity to make a good profit, plumbing business, convenience store, cleaning business or whatever, has access to sufficient funds...and is prepared to take the risk in order to reap the rewards. If things do not work to plan, which is possible, a savvy business owner should have an exit plan. Minimum Wage applicants are not that well off, they probably have little in the way of assets or funds to fall back on. If unemployment levels are high, applicants probably have take whatever they can get and given the balance of power rests on the side of the employer, who does not want to pay any more than he/she can get away with, the applicant is at a disadvantage and at risk of being exploited. Which as history tells us, is a common occurrence.

This is the very reason why Governments legislate Minimum Wage requirements. To protect the vulnerable. The vulnerable are not the one's who go willingly into business because they see the rewards, and then cut costs by paying their workers as little as possible.

No, the prices vary from one seller to another, just as with wage-earners. Not all sellers offer the same prices, because they compete, and the greedy buyers, consumers, seek the lower prices and "exploit" the sellers or independent contractors, some of whom operate at bare survival level and cannot pay their expenses.

Business practice is a different issue. The big players such as Coles and Woolworths undercut the 'mom and pop' stores and compete with each other, but still manage to make a healthy profit. Whatever businesses do, workers still need to earn a sufficient income in order to meet their cost of living.

As for your claim that ''greedy customers who pay them "as little as possible" - it is the contractor who may undercut the quote of his competitor if there is insufficient work around, perhaps due to too many in the business, and not because of ''greedy customers.

In my experience, there is basically a going rate to have the car serviced or buy groceries, clothing, etc, and no matter how 'greedy' I may be as a customer, the proprietors of these businesses don't lower their prices just because I am 'greedy' and want to pay less.

You have given us no fundamental difference between wage-earners and independent contractors which justifies protecting one from "exploitation" by selfish buyers but not the other.

Yes I have. The financial and bargaining positions of business owners and MW applicants are entirely different. An applicant may be told ''that is the rate, take it or leave it'' - and given unemployment rates, someone more desperate comes along and thereby drives wages lower. A race to the bottom...and again, the reason why a government steps in and legislates a minimum wage to protect the most vulnerable. The most vulnerable is not usually the business.

 

[Togo]

#142
Togo

A "fair rate" is the market rate, based on supply-and-demand. Just like the "fair" price for a loaf of bread is the market price, set by supply-and-demand.

This price is "fair" because it is best for consumers. It ensures that the price or wage is high enough in order to get the production done, for the consumer's benefit, but no higher than the minimum necessary to accomplish this production.

I don't agree. Do you have any evidence for this (ideological?) assertion?

You mean the price for a loaf of bread at the store is not the best price for consumers? You would have all products be priced by a different mechanism? What pricing mechanism would be better for consumers?

How about the one we have now?

Right, the current pricing mechanism is the right one, for the reason I just gave above. It's based on supply-and-demand,

Only very loosely.

The point is that merely considering supply and demand doesn't give you a clear picture of what is going on.

Consider two bakeries. The first is the price-efficient bakery. It produces the most popular type of bread at the very lowest price it can. Its staff aren't very well trained - they don't know much about bread because they don't need to, and they're often tired and sick. They work while sick, unless they literally can't stand, because they're on a zero-hours contract and only get paid for the hours they work.

The second is an actual bakery. There you'll see a vast array of different types of bread, at an impressive variation of prices. What we're seeing is a business producing a range of products that compete with each other. The staff are alert, helpful, and well-motivated. Obviously all this costs, and the most popular types of bread are 10% more expensive than at the efficiency store.

Why do you suppose that the second type of bakery is more common, attracts more business, and makes more money? Could it be customers select on something other than price?

Surely that serves customers far better than a simplistic model where you only take into account supply and demand.

Planet Earth to Togo. Planet Earth to Togo. Come in Togo.

OK, are you tuned in now? This is Planet Earth, where the market system is used to price virtually everything bought and sold. Including groceries at the store. I.e., based on SUPPLY-AND-DEMAND, not on anything other than supply-and-demand.

That isn't true, sorry. Supply and demand are factors, of course, but not the only factors. That's why I refer to your 'supply and demand and not anything other than supply and demand' as simplistic. The real world doesn't work that way.

That means that when the supply of something increases or the demand for it decreases, all else being equal, the price goes down, and when the supply decreases or the demand increases, the price goes up.

Eh... No. Again a gross oversimplification.

Planet Earth -- got it?

But I'm curious -- that planet you thought you were at, where supply-and-demand is not the "model" for setting prices, what is the pricing mechanism?

What else is taken into account for setting prices than the principle of supply-and-demand?

Well, just off the top of my head, brand, firm image, market segmentation, lifestyle affliation, Ease of acquisition/ease of use, additional features, associative buying, variety/standardisation, regulatory factors, tax implications, familiarity, market sentiment, and so on.

How are we hurt by being allowed to make choices?

The cost of providing a range of products is passed onto the customer in the form of higher prices.

Providing more products -- more consumer choice -- leads to higher prices?

What does this mean?

It means that it's more expensive for a bakery to make 26 different kinds of bread than it is for it to make three.


<lengthy section about setting up a communist utopia in Siberia deleted.>

OK, so here's where the logic brings us: Those opposed to minimum wage believe it's good for people to have free choice, . . .

Well apparently they don't. They talk about free choice, but they don't support any form of free choice that doesn't come in the form of lower prices . . .

Apparently they do. They object to minimum wage because it denies employers and employees freedom to choose the wage level.

They support all free choice, including the choice to buy something more expensive.

Do they support the freedom to set hygiene levels? What about the freedom to sell counterfeit goods, or buy with counterfeit currency? Do they support the freedom to ignore safety standards, mug people in the street, or enslave others?

All of these make products more expensive, and thus, by your argument, hurt us all. Yet it seems that 'those opposed to minimum wage' only believe in freedom under quite narrowly defined conditions.

However, there is fraud in some promotions of these and other products. The terms "organic" and "fair trade" are not clearly defined, and some consumers are defrauded into believing there is something superior in a product labelled as "organic" or "fair trade," when the product is not really superior at all, and there is nothing wrong with investigating promotional claims or advertising that misuse these terms in a way as to defraud consumers.

The benefits of "consumer choice" do not apply in those cases where the choices are a response to fraudulent claims for the products they are choosing.

So you're arguing that the freedom to call your product whatever you want and express your opinion about its merits, should be limited to those claims that aren't fraudulent or misleading, because that's not a true expression of consumer choice, and thus denies the benefits that usually come from consumer choice?

Great. So that's consumers, what about producers/suppliers? Presumably they should also be protected from fraud, robbery, or market fixing from their customers, or else you don't get a functioning market there either.

And then there's coercion. You shouldn't really have private fire fighters watching a building burn down while the owner decides whether or not to pay a special fire-sale price for their service. Similarly, you presumably don't want ambulances negotiating for extra payment while their patients lie dying on the kerbside. None of these things help the operation of a free market, so they should be banned.

So why is paying desperation wages to a worker any different? Can you see how there isn't a truly free choice going on there, and how the market might be distorted once payment per worker goes below a certain level?

 

[Lumpenproletariat]

#151

DBT

But why are only wage-earners entitled to be protected from being exploited? What about independent contractors? Why aren't they entitled to similar protection? And what about small businesses, sole proprietors, who are often exploited by customers who pay low prices or fees? or by other businesses who pay them low prices for their service?

First off, exploitation of small business owners by customers: when you call a plumber and he gives you a quote, you may accept the quote or call another plumber to get another quote.

Likewise, an employer can accept quotes from different workers or applicants and check with more applicants to get a different quote. They do this in one form or another.

Not if there is a shortage of workers in a given sector.

Which is hardly ever the case.

Then employers offer pay rates to attract employees.

The same can be said of plumbers and other independent contractors where there is a shortage of them. Customers can offer to pay a higher rate. This also happens in one form or another. Also buyers can modify their requirements, reduce their demand, in order to attract someone to take the job.

There can be a shortage of independent contractors just as much as a shortage of workers, and the buyer/customer/employer responds the same way. There is no more reason for the state to protect the wage-earners than to protect the independent contractors.

During a a labour shortage, firms compete with each other to attract workers by offering better rates of pay.

The same is true with independent contractors. These workers too can get increased fees when they are in short supply.

All well and good for those in that position, but the point remains: those at the bottom of the heap cannot afford to compete in terms of ever decreasing pay pay rates.

That's also true of independent contractors who are at the bottom of the heap. You're still not giving a reason why wage-earners need the state to protect them from being exploited but independent contractors do not.

There is a certain level where it is simply not possible to make ends meet. Unlike a business with a reasonable cash flow, MW workers may have nothing in reserve.

The same is true for the lowest-income independent contractors. Not every business has a "reasonable cash flow" to play with.

Not being able to make ends meet on the rate they get paid, and having no reserve to fall back on...what are they to do?

What are the equally-desperate poor independent contractors to do? Why do you fall all over yourself feeling sorry for the poor exploited wage-earner but turn a blind eye to the poor independent contractor who is also exploited and equally in need of the state to save him from the greedy exploiters who don't pay him enough?

Tell me how someone is supposed to pay the bills on a rate that is not sufficient to meet even the basic needs of that worker, based on market prices.

And how is the independent contractor supposed to pay the bills on an income that is not sufficient? Doesn't the independent contractor also have basic needs?

You have to tell us a difference between wage-earners and independent contractors that explains why wage-earners have to be protected against "exploitation" but independent contractors don't need the protection.

These are two different situations, which I explained in my last post: someone who starts a business does their homework, sees an opportunity to make a good profit, plumbing business, convenience store, cleaning business or whatever, has access to sufficient funds...and is prepared to take the risk in order to reap the rewards.

It's not essentially any different than what a wage-earner does.

The wage-earner or job-seeker also "sees an opportunity to make a profit" and frequently needs "funds" or resources in order to get the training and present himself to the employer, and is also taking a risk.

If things do not work to plan, which is possible, a savvy business owner should have an exit plan.

No more than a wage-earner should. If a wage-earner is entitled to state intervention to prop him up because his plan didn't fly, then why isn't an independent contractor also entitled to state intervention?

Minimum Wage applicants are not that well off, they probably have little in the way of assets or funds to fall back on.

Likewise poor independent contractors. Some of those independent contractors are so desperate that the reason they became independent contractors in the first place is that they were unable to find a wage-earning job and so are even MORE desperate than that low-paid worker who at least was able to get hired at a low-wage job.

If unemployment levels are high, applicants probably have to take whatever they can get and given the balance of power rests on the side of the employer, who does not want to pay any more than he/she can get away with, the applicant is at a disadvantage and at risk of being exploited. Which as history tells us, is a common occurrence.

Ditto ditto ditto the poor independent contractor when times are bad. In tough times the balance of power rests on the side of the greedy customer, "who does not want to pay any more than he/she can get away with" and so the independent contractor "is at a disadvantage and at risk of being exploited."

This is the very reason why Governments legislate Minimum Wage requirements. To protect the vulnerable.

So why doesn't it legislate minimum revenue requirements to protect vulnerable independent contractors?

The vulnerable are not the ones who go willingly into business . . .

You mean wage-earners did not go "willingly into" their job? If you mean that wage-earners took that job only out of desperation and not "willingly" then the same is true for many independent contractors, who would have preferred to have a comfortable 8-5 job but could not get hired, and so out of desperation went into business instead and work 60 hours per week or longer. Often at lower than minimum-wage equivalent income level.

. . . because they see the rewards, and then cut costs by paying their workers as little as possible.

"their workers"? What workers are you talking about? Most of these desperate money-grubbers don't have the resources to pay workers. If they do hire any, it has to be under-the-table, off-the-books, because they can't afford the bookkeeping costs and compliance with the labor laws.

Whatever businesses do, workers still need to earn a sufficient income in order to meet their cost of living.

But independent contractor workers do NOT need to earn a sufficient income in order to meet their cost of living?

Why do you keep pouring pity onto the wage-earners but fail to recognize the plight of poor independent contractors who are also workers with needs and who are exploited?

You keep pretending to answer the question but continue to ignore that the independent contractors have all the same complaints of being exploited as the wage-earners have.

There can be only one reason for your discrimination against independent contractors: They are a small minority of producers, whereas wage-earners are the large majority of the producers. So you are simply pandering to this large mass of crybabies who are demanding to paid more, whereas the smaller class of independent contractors do not have the same clout and cannot whine as loudly. This is the only difference between the two classes of producers. The fact is that the poor independent contractors are exploited even more than poor wage-earners.

As for your claim that ''greedy customers who pay them "as little as possible" - it is the contractor who may undercut the quote of his competitor if there is insufficient work around, perhaps due to too many in the business, and not because of ''greedy customers.

It's both. The desperate contractor lowers his price in order steal some greedy customers away from the competition.

And likewise a desperate job-seeker may lower his price -- what is a "scab"? -- in order to "steal" a job away from the higher-paid worker, in order to get hired by the greedy employer-customer.

They're all "greedy" -- the scab worker, the overpaid worker who is replaced, the employer seeking lower labor cost, the desperate independent contractor struggling to survive, and the greedy customer looking for a lower price.

They're all equally greedy, and the low-paid independent contractor is just as desperate and exploited and in need of protection as the low-paid wage-earner. You still haven't showed how the poor wage-earner is any more entitled to protection than the poor independent contractor.

In my experience, there is basically a going rate to have the car serviced or buy groceries, clothing, etc, and no matter how 'greedy' I may be as a customer, the proprietors of these businesses don't lower their prices just because I am 'greedy' and want to pay less.

Yes they do. There is no "going rate" that they all charge. They're always trying to entice customers by advertising lower prices.

As a buyer you may notice only the higher prices. But when one raises his prices in order to be able to feed his family or put his kids through college, his competitor then does the same, but maybe not as much, and so by not raising his prices as much as his competitor, he is actually trying to "steal" you away from his competitor, appealing to your "greed" because you're not interested in the independent contractor's need to survive and feed his family, but only in your own need.

You naturally imagine that everyone you buy from is "greedy" for charging you too much, but to them you are "greedy" for seeking the lowest price and not allowing them to raise their price enough to adequately feed their family.

You have given us no fundamental difference between wage-earners and independent contractors which justifies protecting one from "exploitation" by selfish buyers but not the other.

Yes I have. The financial and bargaining positions of business owners and MW applicants are entirely different.

Not when those business owners are small poor independent contractors. They're just as bad off financially as low-paid wage-earners, and have equally poor bargaining power.

An applicant may be told ''that is the rate, take it or leave it'' - and given unemployment rates, someone more desperate comes along and thereby drives wages lower.

Same with independent contractors. It's called "competition" -- a competitor comes along and drives the prices lower (or drives them down from the higher level you had to raise your price to in order to be able to pay your bills). The principle is the same, no matter whether the prices or wages are going up or down -- the competition drives the prices/wages down from what they otherwise would have been, and this squeezes the marginal workers who cannot afford to live on the competitive price/wage level.

A race to the bottom.

Just as true for poor independent contractors struggling to survive as for poor wage-earners. And the winner is the consumer.

The "race to the bottom" for workers/producers is a "race to the top" for consumers who are the beneficiaries. The least competitive always whine about the "race to the bottom" which is good for consumers and thus for the economy, and thus for everyone, except perhaps a small number of the least competitive.

. . . the reason why a government steps in and legislates a minimum wage to protect the most vulnerable.

Poor independent contractors are the most vulnerable.

The most vulnerable is not usually the business.

Poor independent contractors are the most vulnerable. You can't prove that wage-earners are any more vulnerable, but only that they're a much larger class than the poor independent contractors. You pander to a large mass of "vulnerable" victims and ignore the minority who are just as as vulnerable but can be written off because they don't have the same degree of power as the mass of low-income wage-earners clamoring for a subsidy.

And the subsidy you provide to the mass of wage-earners then drives up prices everyone has to pay, including all the poor. So 100 million poor consumers are forced to pay higher prices in order to subsidize the incomes of a few million poor workers.

 

[ksen]

Why are people still indulging Free Trader?

 

[AthenaAwakened]

Why are people still indulging Free Trader?

Good question

 

[DBT]

Why are people still indulging Free Trader?

Good question

I'm done with it. Just looking at another wall of text, mostly a repeat of things that have already been addressed, has finished me off.

 

[Lumpenproletariat]

What price is not determined by supply-and-demand? Shouldn't the price of labor be set by supply-and-demand?

#152

Togo

A "fair rate" is the market rate, based on supply-and-demand. Just like the "fair" price for a loaf of bread is the market price, set by supply-and-demand.

This price is "fair" because it is best for consumers. It ensures that the price or wage is high enough in order to get the production done, for the consumer's benefit, but no higher than the minimum necessary to accomplish this production.

I don't agree. Do you have any evidence for this (ideological?) assertion?

You mean the price for a loaf of bread at the store is not the best price for consumers? You would have all products be priced by a different mechanism? What pricing mechanism would be better for consumers?

How about the one we have now?

Right, the current pricing mechanism is the right one, for the reason I just gave above. It's based on supply-and-demand,

Only very loosely.

What about the current market is not based on supply-and-demand? You mean it's not a perfect utopian competitive free market? that there is some amount of deviation from perfect competition and perfect information to all buyers and sellers? That's beside the point. We also don't have perfect justice or perfect democracy and so on. But we approximate it well enough. We are closer to a pure competitive free market where supply-and-demand sets the prices than we are to pure Democracy or Pure Justice.

And whatever is in our market system that goes against supply-and-demand for setting prices is making the market and our whole economy worse off.

Name what is contrary to supply-and-demand in our current market system for setting the prices of the stuff bought and sold.

The point is that merely considering supply and demand doesn't give you a clear picture of what is going on.

It is mainly supply-and-demand that is going on, setting the prices for everything. And anything else that affects prices is an aberration and a distortion which makes the market worse and makes buyers and sellers worse off. Of course there are some distortions and imperfections in any system.

What else is it that is "going on" other than supply-and-demand, to set the prices?

Consider two bakeries. The first is the price-efficient bakery. It produces the most popular type of bread at the very lowest price it can. Its staff aren't very well trained - they don't know much about bread because they don't need to, and they're often tired and sick. They work while sick, unless they literally can't stand, because they're on a zero-hours contract and only get paid for the hours they work.

The second is an actual bakery. There you'll see a vast array of different types of bread, at an impressive variation of prices. What we're seeing is a business producing a range of products that compete with each other. The staff are alert, helpful, and well-motivated. Obviously all this costs, and the most popular types of bread are 10% more expensive than at the efficiency store.

Why do you suppose that the second type of bakery is more common, attracts more business, and makes more money? Could it be customers select on something other than price?

In both cases it is supply-and-demand alone which is setting the prices. You haven't named any factor at work that is not a part of the supply-and-demand factors setting the prices of the bread in each case.

You need to learn what "supply-and-demand" really means. You obviously imagine that it means that quality of products is totally ignored by producers and buyers and sellers and that the only goal of the market is to keep down the price no matter what, even to the point of sacrificing the quality.

But "supply-and-demand" means serving the consumers with both lower price and higher quality. What does "demand" mean unless there is such a thing as better quality, which is always preferred, and if the price for it is not so much higher, then the buyer chooses the higher quality over the lower price.

So again, you cannot name any factor at work in the market setting the prices which lies outside the law of supply-and-demand.

. . . the market system is used to price virtually everything bought and sold. Including groceries at the store. I.e., based on SUPPLY-AND-DEMAND, not on anything other than supply-and-demand.

That isn't true, sorry. Supply and demand are factors, of course, but not the only factors.

You can't name any other factors. When you try, as in your example of the 2 bakeries, you distort the meaning of "supply-and-demand" to exclude quality as being relevant. Name a factor affecting price which is not a function of supply-and-demand.

One could argue, e.g., that prices are set by the cost of production. But that is not correct. Rather, cost is a factor of supply. As the cost goes up, the supply goes down (all else being equal), and so that higher cost is factored into the price because of its impact on supply. And in this sense, there is NOTHING that determines the price outside of supply-and-demand. If there is, name what it is. You have named no factor lying outside supply-and-demand.

That's why I refer to your 'supply and demand and not anything other than supply and demand' as simplistic. The real world doesn't work that way.

And yet you cannot name one factor in the real world that determines price that is not part of supply-and-demand. Or rather, not one legitimate factor. I've granted that there might be distortions in the system which counteract supply-and-demand and which make everyone worse off. These are perverse elements, not anything legitimate that impacts on prices.

That means that when the supply of something increases or the demand for it decreases, all else being equal, the price goes down, and when the supply decreases or the demand increases, the price goes up.

Eh... No. Again a gross oversimplification.

And yet you cannot name any factor that causes price to go up, unless it's a case of higher demand or lower supply; and you cannot name one factor that causes price to go down, unless it's a case of lower demand or higher supply.

Name such a factor that impacts on the price that is not part of supply-and-demand.

What else is taken into account for setting prices than the principle of supply-and-demand?

Well, just off the top of my head, brand, firm image, market segmentation, lifestyle affliation, Ease of acquisition/ease of use, additional features, associative buying, variety/standardisation, regulatory factors, tax implications, familiarity, market sentiment, and so on.

Every one of those is a part of supply-and-demand.

Consumers become familiar with a brand name, through experience with that brand. It is convenient for them to use that brand name as a guide to tell them that this product will give them what they want, better quality or lower price, whereas some unknown brand is more risky. It's mainly a matter of convenience. Convenience is part of quality. Obtaining the product easily, with minimum fuss, is worth paying a little extra for.

Your laundry list above does not give us any example of a factor in the market that sets price outside the parameters of supply-and-demand.

Don't throw around a laundry list and pretend that you have proved your point by sheer weight or volume of the examples.

Just zero in on ONE good example and give us the analysis. Pick out ONE EXAMPLE of a factor that affects price which lies outside supply-and-demand. Prove that it lies outside supply-and-demand. Stop pretending you have given us an example when you have not.

Supply-and-demand is the reliable principle that it is by virtue of the fact that it takes into consideration ALL the factors that come into play with buyers choosing what to buy and sellers deciding how to set their prices. It is an all-encompassing principle of how the prices are set. From your mistake above, thinking that supply-and-demand means that quality is totally ignored, you obviously don't understand what "supply-and-demand" really means and thus you mistakenly distort it into something much more limited than it is.

How are we hurt by being allowed to make choices?

The cost of providing a range of products is passed onto the customer in the form of higher prices.

Providing more products -- more consumer choice -- leads to higher prices?

What does this mean?

It means that it's more expensive for a bakery to make 26 different kinds of bread than it is for it to make three.

If that's all you mean, then you have not proved that we are "hurt" by being allowed to make choices.

Perhaps in some cases a wider range of choices can mean higher prices.

But the wider range of choices is what the consumers want, in that case, and they are willing to pay the higher prices in return for that extra choice. Where they don't want to pay such higher prices, they will patronize those sellers who save on cost by restricting the choices.

So no one is "hurt" by more choice. Higher price also does not "hurt" us as long as we're free to choose if we want to pay more in order to get more. An improved product makes us better off, even though it has a higher price tag, because that higher price is worth paying in order to get the improvement.

So higher price per se does not "hurt" us and neither does more choice "hurt" us. The only thing that hurts us is reduced choices that are imposed onto the market by someone other than the buyers and the sellers themselves making their own decisions.

When the market itself reduces the choices, because this saves on cost and reduces prices, and the buyers respond by choosing these lower-price products, then the reduced choices in this case are beneficial to the buyers. There can be cases where there are too many choices, far beyond anything that offers practical alternatives to consumers, and the vast range of choices serves more to confuse the consumers and make them turn away. So supply-and-demand ends up weeding out some of the offers and reducing them down to a manageable number that consumers can more easily relate to.

So it is incorrect to say that more choice necessarily "hurts" consumers, but rather, in some cases where there really are too many choices, the normal competitive market forces will do their job of reducing the choices to the benefit of the consumers, so that the total net service to consumers is kept at the maximum level.

There is a practical limit to everything, even to choices. It would be far too costly, e.g., to provide 2 or 3 billion different car models or TV models.

OK, so here's where the logic brings us: Those opposed to minimum wage believe it's good for people to have free choice, . . .

Well apparently they don't. They talk about free choice, but they don't support any form of free choice that doesn't come in the form of lower prices . . .

Apparently they do. They object to minimum wage because it denies employers and employees freedom to choose the wage level.

They support all free choice, including the choice to buy something more expensive.

Do they support the freedom to set hygiene levels? What about the freedom to sell counterfeit goods, or buy with counterfeit currency? Do they support the freedom to ignore safety standards, mug people in the street, or enslave others?

They support all freedoms, or free choice, for anything that does not infringe on someone else's free choice or constitute an act of violence or deprivation toward those other than the buyer and seller. And this includes freedom from fraud. To say they favor "freedom" obviously does not mean freedom to commit crimes, to rape women, perform assasinations for a price or drop an H-bomb on a city, and so on.

We're talking about freedom to buy something produced by cheap labor, or produced 10,000 miles away (or even 10 million or 10 billion miles, or light years, if some cheap imports can be made available from some other galaxy somewhere), and other choices made by the buyers and sellers without interference from others, as long as the product or the transaction does not interfere with the lives of those others.

There is a huge difference, e.g., between a transaction which pollutes the air, which does interfere with the lives of others than just the buyer and seller, and a transaction where cheap labor is hired. The latter impacts on no one other than the particular buyer(s) and seller(s) involved in the transaction, including the employer(s) and employee(s), as long as they are making their choices freely. No one outside this transaction, other than buyer(s) and seller(s), is impacted, and so it does not do any net damage to the world, since those impacted are all making their own choices and they each know what is in their interest, and they all gain a net benefit, since each one knows what is to his/her benefit.

All of these make products more expensive, and thus, by your argument, hurt us all.

Those who favor free choice do not mean free choice to commit crimes etc. This should be obvious, and to raise this kind of argument is silly and really an admission that you have no argument to offer. Free choice whether to work or to pay a worker at lower-than-minimum wage obviously is quite different than a choice to assassinate someone.

So your argument in favor of minimum wage boils down to this: Free choice to hire or to work at less than minimum wage is a choice that is equivalent to that of choosing to commit murder or torture people or drop an H-bomb on a city and so on, and to want free choice is to want crimes and terrorism and assassinations and everything cruel.

And except for this way of defining "free choice," which necessarily leads to the conclusion that all "free choice" is bad for us and "hurts" us, there is no reason to restrict the free choice of employers to hire, or wage-earners to work, at any wage level as low as they wish or can agree on, without outside interference.

Your objection to low wages is totally determined by your definition of "free choice" as meaning necessarily the choice to murder and pillage and massacre and terrorize or do anything criminal that somone wants to do. And so "freedom" or "free choice" in your logic must include freedom to commit crimes, and anyone in favor of "freedom" or "free choice" is in favor of people being allowed to murder and pillage and terrorize and so on.

And this is your fundamental argument for having a minimum wage law.

Yet it seems that 'those opposed to minimum wage' only believe in freedom under quite narrowly defined conditions.

Yes, they don't mean freedom to massacre and murder and terrorize and commit every imaginable crime. Yes, "freedom" or "free choice" does not extend to the point of allowing everything anyone might want to do no matter how criminal it might be.

It ought not be necessary to point this out. There is something wrong with distorting "freedom" or "free choice" to mean freedom to commit criminal acts.

However, there is fraud in some promotions of these and other products. The terms "organic" and "fair trade" are not clearly defined, and some consumers are defrauded into believing there is something superior in a product labelled as "organic" or "fair trade," when the product is not really superior at all, and there is nothing wrong with investigating promotional claims or advertising that misuse these terms in a way as to defraud consumers.

The benefits of "consumer choice" do not apply in those cases where the choices are a response to fraudulent claims for the products they are choosing.

So you're arguing that the freedom to call your product whatever you want and express your opinion about its merits, should be limited to those claims that aren't fraudulent or misleading, because that's not a true expression of consumer choice, and thus denies the benefits that usually come from consumer choice?

Great. So that's consumers, what about producers/suppliers? Presumably they should also be protected from fraud, robbery, or market fixing from their customers, or else you don't get a functioning market there either.

There can be such a thing as fraud by consumers. In general there is no need to police consumers, however, or impose laws, other than against shoplifting or something of that nature.

If you think there is fraud on a grander scale being committed by consumers, then you need to give an example.

And then there's coercion. You shouldn't really have private fire fighters watching a building burn down while the owner decides whether or not to pay a special fire-sale price for their service. Similarly, you presumably don't want ambulances negotiating for extra payment while their patients lie dying on the curbside. None of these things help the operation of a free market, so they should be banned.

How does this relate to our topic? The above are public services that generally are not performed by private competing companies. The marketplace supply-and-demand applies to the private sector where there is competition and buyers pay individually for a product or service.

So why is paying desperation wages to a worker any different?

Because that is a private sector transaction only which impacts only that employer and worker.

If that worker and employer did not exist, the rest of the world would be no better off. So the existence of that worker and employer, or the existence of that job or of that deal between a buyer (employer) and seller (worker) does not make the rest of the world any worse off. Unlike a polluting company which makes the rest of the world worse off by their polluting activity.

You cannot claim that someone is interfering with other people, by their action, if the existence of that someone, or their action, would make no difference if it did not exist.

You have to show that the existence of that offending party, or of that employer and worker, or of their action, is making others worse off than they would be if those offending ones did NOT exist.

How is the world made worse off by the existence of that employer and worker? If they were robbing you, mugging you on the street, or shooting up a bank, etc., then you could say that their existence, or their activity, is making the rest of the world worse off. But that one is hiring the other at sub-minimum wage does not make the rest of the world worse off than it would be if that employer and worker did not exist.

You can't be hurting someone, or doing them injury, if what you are doing is not making them any worse off than they would be if you did not even exist.

Can you see how there isn't a truly free choice going on there . . .

But there IS truly a free choice. Both of the parties, employer and employee, are made better off by the transaction, because either is free to say no if it's not in their interest. Even if the worker was hoping to be paid a higher wage, he is still free in choosing the lower wage, because the employer is not making that worker any worse off than he would be if the employer did not exist.

The employer is offering that worker a possibility that would not exist if that employer did not exist. The worker can reject it or accept it. If that employer should be suddenly snuffed out, suddenly croaks from a heart attack, so the deal's off, that worker is no better off than he was before. The employer did not interfere with that worker's life by offering him a low-wage job. He leaves the worker no worse off than he would have been if the employer had not even existed.

The only employer who is doing harm to the worker, and denying him free choice, is one who makes the worker worse by his (the employer's) existence. But not one whose only effect on the worker is to increase that worker's range of choices by a small measure. An additional option that the worker did not have before does not do injury to him or curtail his free choice.

. . . and how the market might be distorted once payment per worker goes below a certain level?

But no one is harmed as long as each person, buyer and seller, employer and worker, is free to choose whether to enter into the transaction.

The change in the market is that the cost of production decreases, and thus there is some incremental downward pressure on prices, which is good for all consumers, and thus for the whole society.

There is no distortion, even if the payment per worker goes down to zero, because the workers like doing the work and do it for free. They're still doing what's in their interest, while all consumers benefit from the reduced cost of production.

There can be no "distortion" or harm to the market or the economy unless someone is injured or made worse off. Who is made worse off? The workers won't choose to take that job if it makes them worse off, so it can't be the workers who are worse off. So who's made worse off by the payment to the workers going down below some minimum-wage level?

 

[The Helmetmaker]

All humor aside, yawn.

SUMMARY AND POLICY ADVICE
While low wages contribute to the dire economic straits of many poor and low-income
families, the argument that a higher minimum wage is an effective way to improve their
economic circumstances is not supported by the evidence.

First, a higher minimum wage discourages employers from using the very low-wage,
low-skill workers that minimum wages are intended to help. A large body of evidence
confirms that minimum wages reduce employment among low-wage, low-skill workers.
Second, minimum wages do a bad job of targeting poor and low-income families.
Minimum wage laws mandate high wages for low-wage workers rather than higher
earnings for low-income families. Low-income families need help to overcome poverty.
Research for the US generally fails to find evidence that minimum wages help the poor,
although some subgroups may be helped when minimum wages are combined with a
subsidy program, like a targeted tax credit.

The minimum wage is ineffective at achieving the goal of helping poor and low-income
families. More effective are policies that increase the incentives for members of poor
and low-income families to work.

http://wol.iza.org/articles/employment-effects-of-minimum-wages-1.pdf

The minimum wage was created and implemented by eugenicists back in the thirties. The idea, as always with leftists, was to use government to improve society. The method was to displace the lowest levels of society by pricing them out of work. It was believed better to support (and forcibly sterilize, or even euthanize) those people for a generation so that "their kind" could no longer drag society down. (GBS's infamous test: Sir, or Madam, please justify your existence.) Wonderful people!

 

[Lumpenproletariat]

#158

The Helmetmaker

The minimum wage was created . . . to displace the lowest levels of society by pricing them out of work.

That was not the motive. Rather, it was a positive one, of pandering to the majority of wage-earners, to those from the middle level downward, and of obsessing on these to the exclusion of those at the lowest levels. It was not to target the lowest levels for exclusion but rather to give benefits to those just above them, and upward to about the middle of the income level, to win their applause and votes and gain popularity.

It was not an act of hate and extermination of the lowest class, but of ignoring that class, pretending that they did not exist, because they are a small minority, and sacrificing them to the benefit of those in the next brackets up, because they are a much larger group.

These ones, from about the bottom 5% upward to the 40% or 50% level, are easily deluded into believing that the economy is made better off by their group being artificially propped up, even though everyone, including this group, has to pay the cost for it. But it is easy for people to ignore the cost of their utopian schemes to make society better.

It was believed better to support (and forcibly sterilize, or even euthanize) those people for a generation so that "their kind" could no longer drag society down.

They could not have been so deluded as to be thinking in these terms. Those lower classes who are willing to work at extreme low compensation levels, 5% income level or lower, do not "drag society down" just because they are low-paid.

This misperception is based on the false Keynesian-Galbraithian dogma about the benefits to the economy of people spending money, and how paying higher wages to them magically causes them to contribute more to the economy with their wonderful spending.

Though many leftist econo-babblers preach this nonsense, they are not so brain-dead as to actually believe it and to want to go around eliminating the very lowest-paid workers as some kind of "deadbeats" because they don't get paid enough money for them to spend to "stimulate" the economy with their spending.

Everyone really knows, regardless what they babble to the contrary, that the economy is not really made better by giving people more money to spend. That kind of babble is really only propaganda for winning votes and building up political power.

By that reasoning, yes, it might make sense for the leftists to seek out the lowest-level workers, who can earn too little to be able to contribute much spending, and to eliminate them from society as some kind of deadbeats for not contributing their share of the needed spending to keep the economy goosed up. But let's get serious -- they don't really believe this cockeyed crap about the need for more spending and to give workers more spending money. When it's time to get serious, they know better.

(GBS's infamous test: Sir, or Madam, please justify your existence.) Wonderful people!

No, one's contribution to the economy is the work one does, and the contribution is actually increased as the compensation to them goes lower. If anyone's existence needs to be justified, it is those who are paid too much, because many of them are consuming more than they are producing.

So again, the motivation is not that of zeroing in on the low-level wage-earners to eliminate them, but rather to pander to those one notch higher, to form a power base from this large group, herding them and stampeding them into a mob to storm the capitol and install the leftist demagogues into power who are whipping this mob into a frenzy preaching to them the emotional sound bytes they want to hear.

This is what the left-wing researchers are doing with their "data" that allegedly proves that minimum wage does no harm. This demagoguery whips the masses into a frenzy and makes those researchers popular and increases votes to the left-wing politicians.

A positive political slogan of giving free unearned benefits to a large class is much more effective at winning votes than a negative one aiming to eliminate a small low-level class of supposed deadbeats.

 

[The Helmetmaker]

Lumpenproletariat


Your opinion ignores historical fact.

Just one quote from one source: ". . . Often presented today as a tool for poverty reduction and income redistribution, the minimum wage is believed to be an efficient and moral social policy. However, during the late 19th and early 20th centuries, proponents of the minimum wage actually desired the negative effects described above. The Eugenics movement sought the improvement of mankind by strong government intervention to isolate and exclude the weakest so as to improve the gene pool." - Vincent Geloso

After WWII the eugenics movement went underground. Today's progressives are a different breed, more akin to fascists than to idealists, but back then eugenics was the road to Utopia. Study some about it - it'll piss you off.